The Modi government’s coffers have seen a significant increase in fiscal year 2025-26. Direct tax collections have registered an annual growth of 6.33 percent, while tax refunds have been issued, with a 16 percent decrease.
This performance is expected to strengthen the country’s economy and the government’s financial management. From April 1 to October 12, net direct tax collections have exceeded ₹11.89 lakh crore, compared to approximately ₹11.18 lakh crore at the same time last year.
Detailed analysis of tax collection
Corporate tax collections have seen a significant increase this year. Net corporate tax collections from April 1 to October 12 reached ₹5.02 lakh crore, compared to ₹4.92 lakh crore in the same period in 2024. Non-corporate tax collections stood at ₹6.56 lakh crore, compared to ₹5.94 lakh crore during the same period last year. Securities transaction tax (STT) collections also showed a modest year-on-year increase of ₹30,878 crore.
This year, the contribution of non-corporate taxes to the total tax collection was around 51.6% and that of corporate taxes was 48.4%, which shows the balanced nature of the tax structure.
Refund Status, Government Goal and Policy
Refund processing declined by 16% in 2025-26. During the same period last year, refunds issued amounted to ₹2,41,749 crore, down from ₹2,03,107 crore this year. Refunds issued to the corporate sector increased to ₹1,40,741 crore, while those issued to non-corporate sectors fell to ₹62,359 crore. The government has prioritized investigating returns for discrepancies, which is causing the process to take time. However, refunds issued to those with correct documents will be issued promptly.
The government aims to collect ₹25.20 lakh crore in direct taxes by the end of this fiscal year, a 12.7% increase over last year. This represents a significant step towards fiscal consolidation and signals stable tax growth.
Economic situation and future strategy
Businesses, as well as individual taxpayers, are strengthening their tax base. The government’s stringent scrutiny and digital tax filing system are promoting transparency and compliance. If current trends continue, the government could reach or even exceed its target. Despite the harsh economic conditions, the robustness of economic policies and the tax system are strengthening the government’s financial position. Tax flows, reductions in refunds, and technology are contributing significantly to this.
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